The free-rider problem makes it unlikely that poverty will be entirely eliminated through private charity
a. True
b. False
Indicate whether the statement is true or false
True
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A reason why discretionary fiscal policy might move the economy away from potential GDP instead of toward potential GDP is that
A) economic forecasts consistently underestimate the impact of fiscal policy. B) it is difficult to know whether real GDP is above or below potential GDP. C) during a recession, politicians prefer increases in government spending over decreasing taxes. D) government programs automatically move real GDP away from potential GDP. E) government programs are always expansionary.
The cost of capital is best described as the
A) opportunity cost of financing a capital outlay. B) funds that must be acquired to finance a capital outlay. C) decrease in stockholder equity due to a capital outlay. D) All of the above
If the primary goal in implementing a tax is to maximize efficiency and minimize deadweight loss, the government should impose a(n):
A. income tax. B. lump sum tax. C. sin tax. D. proportional tax.
The Laffer curve relates
a. the tax rate to tax revenue raised by the tax. b. the tax rate to the deadweight loss of the tax. c. the price elasticity of supply to the deadweight loss of the tax. d. government welfare payments to the birth rate.